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Hot stock: OCBC slips in early-morning trade
SHARES of OCBC slipped in early-morning trade, after it reported a 12 per cent increase in net profit for the third quarter alongside a jump in specific provisions for bad loans that likely reflect pain in the oil-and-gas segment.
The stock was down two Singapore cents at S$11.53 as at 9.05am.
Net profit for the three months ended Sept 30, 2017 stood at S$1.06 billion, up from S$943 million a year ago, with the bank reporting a "sustained momentum" across the group's banking, wealth management and insurance businesses in its key markets of Singapore, Malaysia, Indonesia and Greater China.
Allowances for loans and other assets fell 6 per cent to S$156 million as compared to S$166 million a year ago. But specific allowances for loans for the quarter - an indicator for the extent of weakness in Singapore's oil-and-gas segment - were 40 per cent higher from a year ago at S$138 million, with an increased amount of specific allowances "prudently set aside".
OCBC said that the higher specific allowances were "driven by a number of restructured accounts which, though continuing to service their repayment obligations, exhibited ongoing weakness and declining collateral valuations".
Net interest income grew 12 per cent to S$1.38 billion for the quarter, from a year ago, underpinned by asset growth and higher net interest margin. Non-interest income was one per cent higher at S$978 million.
OCBC is the first of the three Singapore banks to report its results. UOB and DBS will report third-quarter results on Nov 3 and 6 respectively.